Deluge That Flooded Chile Boutiques Engulfs Builder in Probe

  • Road works diverted water into the district of Providencia
  • Sacyr carrying out project on behalf of Costanera Norte

Builder Sacyr SA and the highway operator Costanera Norte SA are being probed by Chilean authorities after road works conducted by the two companies diverted torrential rains into a wealthy neighborhood of Santiago, flooding shops and restaurants. Shares in Sacyr fell.

Four days of rain, which intensified over the weekend, sent water tumbling off the Andes mountains and into the city, cutting water supplies to as many as four million people and triggering a landslide that killed at least two people to the south of the city. A canal designed to divert the Mapocho river around road works in northern Santiago overflowed, flooding the neighborhood of Providencia.

Santiago superintendent Claudio Orrego said the “specific responsibility” lay with Costanera Norte, owned by Milan-listed Atlantia SpA and Canadian CPP Investment, which operates the main East-West highway in the city. It was Costanera Norte that hired Sacyr to build a $197 million project to improve connections to the highway next to the Mapocho river. Orrego said he had asked the Public Works Ministry to investigate the case and treat it with a “firm hand.”

Mapocho river overflows during heavy rains in Santiago on Sunday.

Photographer: Vladimir Rodas/AFP via Getty Images

"We warned the company,” Orrego said in comments broadcast by Canal 13. “I was on the ground last Thursday telling them that there was a possibility of overflowing as a consequence of the rain.”

The Public Works Ministry told Costanera Norte on April 12 to “take all necessary measures” to ensure rain water doesn’t flood local streets, according to a document released by the local press.

Shares in Sacyr fell 0.92 percent Monday in Spain, after tumbling as much as 5.4 percent earlier in the day.

Not Enough

"I imagine that the Infrastructure Ministry will demand that works stop during the winter, because it is inconceivable that this happens again," Orrego said.

Costanera Norte CEO Diego Savino told Chile’s TVN news that water had overflowed a specially built canal in the road works. The canal was designed to hold 80 cubic meters of water per second and failed when it reached 120 cubic meters per second, he said.

“Sacyr is the contractor, but in the end the licensee is always responsible,” Savino said. A spokesperson for Sacyr in Chile didn’t immediately respond to phone calls and e-mails.

Costanera Center

The rain water diverted by Sacyr’s road works flooded shops, bars, restaurants and a number of underground car-parks. While the river bed was only a quarter-full, the road next to it and five meters higher up was a torrent of water.

The basement and a plant providing electricity to the Costanera Center mall, which includes Latin America’s tallest building, were flooded.

“It caught us by surprise in the morning,” said Horst Paulmann, chairman of Cencosud SA, which owns the Costanera Center. “There are thousands of cubic meters of water from the Mapocho river. It is a disaster and we need to see who will responsible for that. This is a calamity.”

Elsewhere, the heavy rains forced the closure of state-owned Codelco’s largest copper mine, El Teniente, and Anglo American Plc’s Los Bronces mine, both near to Santiago. Output is being resumed at Los Bronces, Anglo American said in an e-mailed statement late Sunday. Ten people are still missing and 300 were affected by mudslides, according to Onemi, Chile’s national emergency agency.

Water providers Aguas Andinas SA and Aguas Cordillera SA said that running water is back to 97 percent of homes affected by cuts over the weekend.

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